SoftBank is set to complete its first Spac merger by taking public a Walmart-backed artificial intelligence robotics company in a deal valued at $5.5bn.
Symbotic, an AI start-up that focuses on improving supply chains for retailers, will merge with SVF Investment Corp 3, a Spac sponsored by SoftBank, the two companies said on Monday.
The blank-cheque merger is the first of its kind for SoftBank, which has raised multiple Spacs and has been hunting for suitable private companies to take public.
The merger comes as the market for blank-cheque companies has cooled significantly since the frenzied dealmaking that engulfed the market at the start of the year. Investor redemptions have soared and the crucial Pipe financing market has dried up, forcing companies to seek more expensive forms of funding.
Symbotic, which has deals with retailers including Walmart and Albertsons, uses AI technology to run a fleet of hundreds of robots which move products across warehouses. The Massachusetts-based robotics company said it expected to reach revenues of $433m in 2022, a more than 73 per cent increase compared with 2021.
The deal gives Symbotic an enterprise value of $4.8bn. Gross proceeds from the deal total $725m and include $205m raised through Pipe financing from investors including $150m from retailer Walmart, and the $320m raised from the SVF Spac in March.
SoftBank is also investing $200m in Symbotic through its Vision Fund 2, the $108bn unit which has targeted healthcare and software start-ups, diversifying away from placing multibillion-dollar bets on urban mobility companies which it did through its first Vision Fund. The Japanese group’s second Vision Fund attracted investments from names such as Microsoft and Apple, as well as lesser known entities including the National Bank of Kazakhstan.
The Spac deal comes as retailers warn they face a huge strain from supply chain bottlenecks and labour shortages in the run-up to the hectic Christmas trading period.
Upon closing, existing Symbotic shareholders including the company’s chief executive Rick Cohen will own 88 per cent of the company, with Walmart owning 9 per cent and Spac shareholders holding the rest.
Shares of the SVF Spac rose 0.5 per cent in early trading on Monday morning. The combined group will trade on Nasdaq under the ticker SYM.